Jaiprakash Hydro-Power

Dear Shareholders,
 
 It gives me immense satisfaction to felicitate you for your
 contribution in supporting the Groups listed power company, which
 right from the time it commissioned its BASPA-II Hydroelectric Project,
 has inspired people across the nation for harnessing the power
 potential of the country. The decade gone by, especially the last five
 years, have seen a momentous period for the Group and with the
 determination and dint of hard work, your company, today is poised to
 be amongst the most successfully run power companies in the country
 with world class assets and sustained profitability.  Jaypee Group is
 the only integrated solution provider for Hydropower projects in the
 country with a track record of strong project implementation in
 different capacities and participation in projects that have added over
 8840 MW of Hydroelectricity to the National grid between 2002 to 2008 -
 AN UNPARALLEL FEATURE IN INDIAN POWER SECTOR.
 
 You would be proud to know that in pursuit of excellence which is an
 integral part of group culture, all workers, staff and officers engaged
 in Groups 300 MW BASPA-II Hydroelectric Power Station were successful
 in bagging GOLD SHIELD for meritorious performance in power sector from
 the Ministry of Power for the year 2007-08, a step forward from the
 SILVER SHIELD, BASPA-II HEP won for the year 2004-05.  In this defining
 moment of history, where India strives to achieve an honorable presence
 in august company of developed nations, development of all sectors
 assumes greatest attention from all Indians.  Power sector, which
 directly impacts the common man as well as aids the economic growth of
 the nation, today attracts the focus of all. It is humbling to see
 while as a country we continue to struggle to meet peak shortfall of
 almost 14000 MW where, inthe 11th five year plan, capacity addition of
 78700 MW is proposed, your organization is mandated to be a power
 producer with thermal - hydro mix of over 13520 MWin less than 7 years
 from now.
 
 The 1000 MW Karcham Wangtoo project (Himachal Pradesh) is under
 advanced stage of implementation and is poised to be completed by 2011
 (six months ahead of schedule). In addition, with 3200 MW projects
 coming up in Arunachal Pradesh and 720 MW in Meghalaya, the Group will
 have total Hydropower generation capacity of over 5000 MW by 2016. It
 will be the only company in private sector which will contribute 2000
 MW (Hydro & Thermal) in the 11th plan to the nation.
 
 For a country of our size, policy makers have recommended a power
 regime of 60% hydro and 40% thermal. As an organization, with deep
 faith in potential of our country, it is not a coincidence that your
 portfolio in power business has a judicious mix of thermal and hydro,
 with thermal accounting for 7850 MWand hydro accounting for 5620 MW.
 
 As a responsible corporate citizen, it is our bounden duty to give back
 to the society with interest, to enable future citizens of the nation
 feel proud of their forefathers. You would be delighted to know that
 your company, with 13000 MW capacity of power, has ensured that 6600 MW
 of thermal power would come from super critical technology evidencing
 best environment care while 300 MW BASPA-II Hydroelectric Station and
 400 MW Vishnuprayag Hydroelectric Station today earn Verified Emission
 Reduction (VER), which is testimony of the faith the regulatory bodies
 of the world have reposed in environment care by the company.
 
 Your trust in the company has always enhanced our responsibility and
 further increased our resolve to accelerate our efforts which results
 in growth of company and enhances shareholders value.  Therefore, it
 was found appropriate that business of power generation is consolidated
 under one umbrella which would enable your organization to leverage its
 balance sheet for tapping financing from international market at
 competitive price to enable us keep cost of creating new capacities
 under control. While you would be invited for your consent for the
 proposed amalgamation in due course, I am taking this opportunity to
 share this development, which your Board of Directors have approved,
 based on the emerging opportunities in the international market.
 
 We see unparallel opportunities for growth in power sector.
 Electricity, today, is being traded through exchange which is aimed to
 get the best for the customer in times to come. Therefore, company with
 the most competitive cost of power generation would be the winner. Your
 world class assets, consistent output and well engineered raw material
 supply chain would make company face fiercest of competition with
 aplomb. It would be our continued endeavour to improve our efficiency,
 maintain our consistency and work to achieve growth for shareholders.
 
 At this juncture, I would like to place on behalf of the Board of
 Directors of the Company our deepest gratitude to Banks, Financial
 Institutions, State Electricity Boards, Regulatory Authorities of
 different states and you, without whose trust and support we would not
 have reached thus far. Every member of the company continues to be
 inspired by one fact that, SUCCESS IS NOT A DESTINATION BUT A JOURNEY
 
                                                           Jai Hind
                                                         Jaiprakash 
                                                   Founder Chairman